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EDC looks to raise $112m for Bac-Man expansion project

Bacon-Manito geothermal field, Philippines (source: EDC)
Alexander Richter 7 May 2015

The expansion project involves the commissioning of three more units of the Bac-Man plants and another project in Mindanao.

Energy Development Corp. (EDC) is raising P5 billion (USD $112m) to finance the expansion of its Bacon-Manito geothermal power plants in Albay and another project in Mindanao.

In a press conference after the company’s annual stockholders’ meeting yesterday, officials said the Bac-Man plants are now gaining traction, putting the company on track to meeting its P4.5 billion yearly revenue target from the geothermal plants.

“The P5 billion we’re looking at will finance the steamfield part of our geothermal growth which include Bac-Man 3, 4 and Mindanao 3. For the power plant component, depends on the size but ideally we will finance those on 70 percent debt basis,” said EDC vice president for corporate finance Erwin Avante .

The expansion project involves the commissioning of three more units of the Bac-Man plants.

Tantoco said Unit 3 of Bac-Man would have a capacity of 30 megawatts while Bac-Man 4 may have a capacity of 17 to 20 MW. Bac-Man 5’s capacity is still to be determined.

The Bac-Man plant in Albay consists of Unit 1 (120 MW), Unit 2 (20 MW) and unit 3 (30 MW). In 2014, the company reported an all time high recurrent net income of P9.2 billion , 40 percent higher compared to the 2013 income, driven largely by the uprated performance of the Bac-Man plants.

EDC president and chief operating officer Richard Tantoco attributed the boost in income to the return-to-service of the uprated 140-MW Bac-Man power plants and the successful commissioning of the company’s 49.4 MW Nasulo geothermal power plant in Southern Negros.

“The two larger Bac-Man power plant units, which have been upgraded to 60 MW each, are now operating as the most efficient in our fleet and these improvements, as well as the better performance of all geothermal business units, drove our consolidated revenues to increase by 20 percent to P30.9 billion ,” Tantoco said.

The Bac-Man plants are now operational after more than a year of delay due to breach of contract on the part of its contractors tapped to rehabilitate the facility.

In May 2010 , EDC acquired the Bac-Man plant from the government with a winning bid of $28.25 million in an auction conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to handle the privatization of state-owned National Power Corp. (Napocor).

“In 2014, as we steadily delivered all of the projects we committed, investors’ confidence dramatically improved. First came the restoration of the super Typhoon Yolanda-damaged plants in Leyte several months ahead of schedule, then the units of Bac-Man, then Nasulo, then Burgos wind. In the 2014 yearend investor perception survey, the top two recall items are renewable energy and growth prospects and it seems like Bac-Man has been relegated as an issue of the past,” Tantoco said.

Source: Renewables Biz